DETROIT–PRNewswire)–If the largest generation since the baby boomers has its way, Generation Y, at 75 million strong, might just be the group to help jump start the automotive industry in the United States, according to a new survey from Deloitte. In collaboration with The Eli Broad Graduate School of Management at Michigan State University, the Deloitte survey indicates Gen Y consumers may have an increasingly positive view of everything from auto jobs to American-made vehicles.
As a follow-on to last year’s Deloitte’s survey, “Connecting with Gen Y: Making Cars Cool Again,” this new analysis takes a deeper look at Generation Y’s attitudes and perceptions of vehicles and the auto industry. The survey, “Gen Y: Making the Short List,” offers unique insights into what may capture the attention and shape the opinions of this generation.
One of the most promising indicators that perceptions may be improving is the shift in Gen Y responses regarding jobs in the auto industry. In last year’s Deloitte Gen Y survey, nearly 70 percent of respondents were not interested in working in the automotive industry. In this year’s survey, only 50 percent of Gen Y respondents said the idea of working in the U.S. auto industry was not appealing, showing a significant change in perception year to year.
“A 20 point shift over a year may be indicative of a change in perception of the industry,” said Michelle Collins, vice chairman and U.S. automotive sector leader, Deloitte. “Among the list of challenges facing companies in the current economic environment, recruiting and retaining the best workers is vital to supporting growth initiatives today and in the future.”
Economic challenges sent shockwaves throughout the automotive industry in 2009 and the impact could be felt as consumer perceptions changed concurrently. Gas mileage and vehicle affordability emerged as the most important considerations for Gen Y respondents purchasing cars, as opposed to a year ago when data showed safety as the number one decision-making factor.
Manufacturers affected by economic challenges certainly felt the effects of belt-tightening across the country as federal bailouts and bankruptcies made headlines throughout 2009. The resounding impact of these challenges made a lasting impression on Gen Y respondents, too, with 44 percent preferring to purchase a vehicle from a brand that did not accept federal bailout funds. Similarly, only 36 percent reported they would consider buying a vehicle from a company that is, or has recently been in bankruptcy.
Gen Y consumers may also be taking the value proposition of used cars versus new cars a lot more seriously. According to the survey, approximately 63 percent of Gen Y respondents believe used cars are a greater value than new cars and they’re more than three times as likely to purchase used cars over new. “Generation Y is typically a group that thinks ‘newer is better,’ but as the economy is slow to recover and jobs are hard to find, this generation may help reshape the car buying process,” said Collins.
Another theme emerging from the survey results is that the Gen Y respondents are particularly loyal when it comes to automobiles — loyal to brand and loyal to country. The survey showed that the “Made in the USA” label still carries a lot of weight. More than 50 percent of Gen Y respondents stated it’s important that the vehicle be manufactured in an American factory regardless of the brand. Additionally, nearly half (42 percent) of respondents reported they expect to be driving the same vehicle brand in five years, and that’s up a little more than 15 percent from last year’s survey in which only 27 percent indicated that they expected to be driving the same brand in five years.
Though the responses suggest the make of the vehicle Gen Y drives won’t be changing, the model they drive will likely change drastically over the next five years. According to the survey, SUVs are making a comeback. As the economy slowly rebounds and the price of gas remains lower than 2008, the demand for SUVs is increasing. Nearly one in four (23 percent) respondents see themselves driving an SUV in five years, up from only 11 percent last year.
While bigger may be making a comeback, one thing is certain to the respondents: green is here to stay and they are willing to pay more for it. The majority of respondents (64 percent) stated they were willing to pay more for a vehicle that was either environmentally friendly or one that saves money on energy costs. Nearly three-quarters (73 percent) of respondents declared the environment as an extremely important factor when purchasing a vehicle, and almost half (49 percent) believe the type of vehicle they drive “makes a concrete difference in addressing global and local concerns about the environment.”
Some interesting trends also emerged about Gen Y’s likes and dislikes when it comes to vehicle shopping. Social media sites and blogs may be one of the most popular ways for Gen Y to communicate, but they may not help sway purchasing decisions when it comes to automobiles. According to the Deloitte survey, nearly 60 percent of Gen Y respondents reported they do not look for advice or information on blogs or social media forums before purchasing a vehicle.
Gen Y car buyers tend to turn to on-line search engines to find information on vehicles and they most trust auto manufacturer sites. When it comes to physically going into a dealer, Gen Y respondents are largely unsatisfied with the overall dealership experience. No-haggle is their preferred method of doing business. The survey showed that 85 percent of respondents would prefer to know the final selling price upfront and more than 60 percent stated they would prefer to skip pricing negotiations altogether with a salesperson. Additionally, the majority indicated they are anxious when a dealership salesperson approaches them and prefer to have the sales process occur over the internet without any face-to-face interaction.
“We worked closely with many Gen Y students over the course of this survey and have gained some valuable insights that we hope the automotive industry will hear,” said Collins. “This consumer group accounts for 25 percent of the marketplace, so it’s certainly important that we do all we can to make sure we take their preferences into account.”
For a more in-depth look at the survey and other insights on Gen Y visit www.deloitte.com/us/genyconnection.